Truist Securities analyst Jasper Bibb initiated coverage on Cintas Corp (NASDAQ:CTAS) with a Buy rating with a price target of $625.

The analyst expects incremental margins to run at the upper end of CTAS's historical 20%-30% range and FY26 consensus EPS higher by 10%+ over the next 24 months on moderating wage inflation, favorable material pricing trends, and efficiencies gained through Smart Truck initiatives.

The analyst estimates FY25E EPS of $16.92 (consensus: $15.96) with two years of above-trend incremental margins.

Bibb expects the company to increase repurchase in FY24/FY25 with net leverage of just 1.0x.

The analyst expects First Aid and Fire segments, on a combined basis, to deliver a ~10% organic CAGR over the next five years and drive segment margins to 20%+ vs. 17% today. 

Bibb estimates EPS of $14.22 (vs. consensus: $14.41) for FY24 and $15.72 (vs. street view of $15.96) for FY25.

Price Action: CTAS shares are trading higher by 0.46% at $535.93 on the last check Monday.